Discovering the price of Namibia’s rough diamonds on the international market

Windhoek-Due to Namibian diamonds being of the highest quality in the world, the world’s diamond manufacturers and diamantaires, therefore, have a great appetite for these locally-sourced precious stones. This is according to Kennedy Hamutenya, chief executive officer of Namib Desert Diamonds (Namdia), which was established in 2016 “to discover the price of Namibia’s rough diamonds in the international market”.

According to Hamutenya, Namdia can play a significant role in entrenching Namibia’s economic independence. “It is imperative that we as Namibians take ownership of our decisions and ensure that our strategies towards self-reliance are successfully implemented. And part of those decisions is for us – as Namibians – to be able to exercise our sovereignty, especially over the God-given natural resources for the improved socio-economic development of our country and its people,” Hamutenya said.

Namdia was established in 2016 by the government to serve as a “window on the international diamond market”. This implies that Namdia can, through its purchase entitlement from the Namibia Diamond Trading Company (NDTC) of 15% representative cut-off of the Namdeb Holdings production, go outside of the traditional sales system. This is an outcome of the Sorting, Valuing, Sales and Marketing Agreement concluded in 2016 between the Namibian Government and De Beers, which amongst others, made provision for greater allocation of local diamond production to the local diamond industry and which ultimately led to the establishment of Namdia.

In terms of this agreement, Namdia buys 15 percent of Namdeb Holdings’ run-of-mine production from NDTC. “It must be understood that Namdia buys the diamonds from NDTC and then engages potential buyers to offer best prices possible for these highly sought-after goods,” Hamutenya said.

Hamutenya also explains that there is no homogenous price for diamonds. “In simple terms, diamonds are valued based on the four ‘Cs’ of each diamond, which are carat weight (size); clarity (quality); cut (shape of the diamond) and colour. Each stone is unique in character in terms of colour, clarity, shape and carat, which is a measure of weight. It is crucial that each individual stone is valued according to these criteria. And therefore, it stands to reason that there cannot be a one-size-fits-all price for diamonds. One common indicator is the average price per carat, which is calculated by dividing the sums of the prices of all individual diamonds by the total carat weight.”

Since its establishment in April 2016, Namdia has made great strides. Some of its short-term achievements included the appointment of its board of directors and the executive management team, completion of its own building to operate from and perhaps most importantly, it has made over 14 diamond sales transactions to date. Hamutenya maintains a positive outlook for the diamond industry in 2018.

“Although a continued challenge facing the diamond industry is the question of long-term demand for natural diamonds with the introduction of man-made synthetic diamonds, we in Namibia stand strong on the premise that we have some of the finest high-gem quality stones in the world for which there will always be a demand.

And that demand allows us to fetch a premium price for our stones, through which we can meaningfully contribute towards the socio-economic development of our country. We are confident that we will remain relevant for a long time yet in the global diamond industry,” Hamutenya said.